According to research by KPMG, the share of illicit cigarette consumption is on the rise across Europe. Against the backdrop of the COVID-19 pandemic and the economic and social impact of border closures and lockdowns, consumption of illicit cigarettes (counterfeit, contraband and illicit whites) increased to an estimate of over 34 billion units in 2020. The share of counterfeits even almost doubled, despite an overall decline in cigarette consumption.
While it is an issue that affects mostly all members of the European Union, Germany has sometimes been overlooked in the past. Yet, according to the latest figures, which saw a jump of 200 million illicit cigarettes consumed in 2020, Germany is now the second largest market for illicit cigarettes among the 27 EU member states.
Markus Schütz, head of Illicit Trade Prevention at Philip Morris Germany responsible for the fight against illicit trade in tobacco products, says: “The numbers we’re seeing in Germany give great cause for concern. We must remember that, without exception, every single counterfeit tobacco product carries risk. While the legal production of tobacco products is subject to strict rules and controls, the composition of illegally produced tobacco products is completely uncontrolled.”
Over the past few months, German authorities have conducted seizures of large quantities of illicit tobacco. In September, investigators of the Customs Investigation Office Frankfurt/Main seized 12 million pieces of untaxed cigarettes. Due to the packaging of the cigarettes, it can be assumed that they were not originally intended for the German market. And illicit tobacco isn’t just limited to cigarettes. In October officers from the Essen Customs Investigation Office searched two factory halls in Neuss and seized over five tons of illegal shisha tobacco, over four tons of raw tobacco, over 160 kilograms of smoking tobacco, as well as primary materials, packaging and manufacturing equipment. In fact, over the past years production facilities for illicit tobacco products have continuously moved westward, with various facilities situated in Germany supplying the western European market.
These seizures highlight the scale of the challenge that all countries face in combatting illicit trade and the links with serious organized crime and dangerous criminals. A major factor contributing to the consumption of illegal goods in Germany is its proximity to Poland, one of the key origin markets for illicit tobacco in Europe. A number of seizures have taken place there over the recent months, many close to the borders with neighboring countries.
It is common for illicit traders to use what’s known as “cover loads” to conceal the fake goods being transported. In October, during the inspection of a Bulgarian van on highway 8 near Ulm-Dornstadt, customs officers discovered 201,000 untaxed cigarettes, which were hidden behind boxes of candy and under cookie packages. In another seizure of 600,000 packs of cigarettes, close to the Belarussian border, wooden boards were the cover load. And in a literal attempt to go “over the head” of customs, 50,000 illicit cigarettes were seized in July as they were being transported with a powered hang glider over the Polish border to Ukraine.
Like Germany, Poland has also seen a wave of raids in production facilities within its borders, thanks to the action by local law enforcement agencies. In the last few months alone, illegal cigarette factories in different parts of the country have been raided, and several tons of contraband tobacco and accessories for the production of illegal cigarettes were seized.
These seizures and raids in Germany and Poland are indicative that we are a long way away from stamping out the flow of illicit trade. On the contrary, the consequences of the pandemic have exacerbated the problem.
To counter the illegal trade more successfully in the future, all stakeholders must increase their efforts and enter into resilient cooperation. Law enforcement officials—at the frontline of the fight against illicit trade—should receive all the necessary support they need for their crucial jobs – financially (including manpower), judicially, as well as politically. The private sector also has a role to play and, same as public actors, must be proactive in the fight against criminal undertakings. It is only through joint efforts and collective actions that we will be able to succeed in countering illicit trade.
Written by STOP: ILLEGAL